After major customers reduced orders (believed to be Microsoft), the share price of Himax Technologies, a provider of augmented reality components, fell by 19.1% in September, and analysts saw the company’s stock price lower, which was a concern for HoloLens fans. It may be both good news and bad news.
The stock price plummeted from Nomura's analyst Donnie Teng. After finding that the supply of HoloLens was not strong, he lowered Himax's rating from “buy†to “wait and seeâ€.
Recently, Tom Sepenzis, an analyst at Northland Capital Markets, expressed concerns about the company's share price. He said that "there will be no positive catalyst before the second half of 2017," which caused Himax's stock price to drop by 3% again.
He said:
We believe that major customers are rapidly reducing orders for LCOS and WLO components (all augmented reality components). This may cause the 2016 LCOS/WLO market to receive only about $60 million in revenue, which is lower than the expected $90 million, which will also have a significant impact on 2017 revenue. We initially forecast a potential revenue of US$270 million in 2017, but as major customers want to improve their AR products, we predict that the customer’s orders will almost completely disappear in the first half of 2017. We thought that the revenue of the AR module market in 2017 was US$230 million, but now we have reduced our forecast to about US$35 million to return to R&D.
The good news is that Sepenzis predicts that Microsoft will introduce a new version of HoloLens to the market in the second half of 2017.
Although the forecast for 2017 has undergone tremendous changes, the main reason is that the augmented reality market belongs to an area where people's confidence in their future will fluctuate significantly on a quarterly basis. And we still believe that this market will eventually develop. Himax is working with most of the major OEMs to provide viable products for the market, so we do believe that once the dust settles, the company will become one of the major winners. Therefore, we do not currently change Himax's rating or target price. However, we do not expect any major catalyst for this stock until the second-generation AR equipment is delivered in the second half of 2017.
Sepenzis believes the new device will be a "refined" version. However, at present, it is not yet clear whether the new product can solve the two main problems of current equipment: cost and field of view.
In addition to Microsoft, many other OEMs will provide Augmented Reality and Virtual Reality products to the market in the second half of 2017. They are all based on Microsoft's Windows Holographic platform, and believe that this will create a competitive environment and help solve them. The two issues of cost and field of view. It is understood that Acer, Dell, Hewlett-Packard and Lenovo have stated that they will provide augmented reality and virtual reality devices since 2017.